Most-favored-nation clauses and monopsonistic power: an unhealthy mix?

Most-favored-nations clauses appear in health insurance contracts allegedly to prevent price discrimination by health care providers among competing insurers. In fact, use of these provisions often works to exclude competitors from the health insurance market. This Note examines the antitrust implications of most-favored-nations clauses as used in the health insurance industry.     

"No-hire" clauses in healthcare sector contracts: their use and enforceability

In today's healthcare industry, many hospitals utilize outside agencies for both business and clinical functions. This Article acknowledges the prevalence of outsourcing contract labor in the healthcare arena and focuses on the restrictive provisions included in these employment contracts, particularly "no-hire" clauses. No-hire clauses are often included in contracts between healthcare providers and professional groups that provide clinical service employees to the provider, such as a medical practice group providing physicians to a hospital or an agency providing nurses to a nursing home. These clauses usually provide that the healthcare provider may not directly hire an employee provided by the professional group, nor may it contract with another professional group that later hires the employee. The purpose of a no-hire clause is two-fold: to protect the professional group's investment of time and moneyfor recruiting, training, and establishing the employee's clinical practice, and to give the professional group leverage to retain its employees. While noncompete clauses in employment contracts have traditionally been the subject of litigation, no-hire clauses raise distinct legal issues. Case law provides conflicting views as to the enforceability of these provisions. Some courts find no-hire clauses to be per se illegal restrictions on trade, while others will permit them when they are reasonable within a specific context. The author proposes that a multifactor test be applied on a case-by-case basis to determine the reasonableness of the no-hire provision in a given employment contract and suggests drafting improvements to facilitate enforcement.     

Restraint of trade through hospital exclusive contracts: an economic appraisal of the legal theory

The growth of antitrust litigation in the health care area reflects the developing consensus that competition is as powerful a force in health care as it is elsewhere in the economy. Exclusive contracts between hospitals and hospital-based physician specialists have been prominent among the contested practices. Challenges to these arrangements uniformly assert an injury to competition; for example, that the contracts are a means of gaining monopoly power in some market. But these claims have lacked a solid theoretical basis for general hostility to exclusive dealing of this sort. This article describes several economic considerations that are fundamental to an analysis of this contractual phenomenon. These considerations imply that there is no general economic basis for suspicion, and that the circumstances under which suspicion would be warranted are likely to be rare.     

Exclusion payments in patent settlements: a legal and economic perspective

Legal context. The application of antitrust law to assess settlementsof patent litigation raises difficult issues concerning theappropriate balance of patent law and competition policy. Recentprivate and public invocations of US antitrust law to challengesettlement agreements covering pharmaceutical patents have broughtthese issues to the forefront. The agreements share the commonfeature of an ‘exclusion payment’ from a brand-namedrug manufacturer (the patentee) to a generic drug manufacturer(the accused infringer) in exchange for a promise by the genericcompany to refrain from marketing its product for some time.US federal courts that have examined these agreements have variedin their approach and conclusions regarding the appropriateantitrust analysis to be applied to these settlements. Key points. This article argues that informed antitrust analysisof such agreements must take due note of the ‘probabilistic’nature of patent property rights. Practical significance. The article concludes that exclusionpayments fall outside the scope of a patent's exclusionary scopeand thus are subject to antitrust scrutiny. It demonstratesthat barring anticompetitive exclusion payments in settlementnegotiation prevents collusive bargains that harm consumer welfarewithout discouraging efficient settlements.     

Targeting the terrorists: A legal proposal for assassinating terrorists as a preemptive strike

Recently, Sam Nunn, Chairman of the Senate Armed Services Committee, stated to a gathering of weapons scientists and military planners at Los Alamos National Laboratory that, although the Cold War is over, “this is a world of regional wars, of spreading ethnic, religious and tribal warfare” in which more countries are acquiring the capability to unleash mass death. In January, 1994, then‐Defense Secretary Les Aspin wrote in his annual report to the President and Congress that “[t]he danger that [weapons of mass destruction] might be used against U.S. forces in some conflict is not, unfortunately, theoretical.” In July, 1994, during a visit to Moscow, FBI Director Louis Freeh commented that the efforts of organized crime to steal or buy weapons‐grade nuclear material is “the greatest long‐term threat to the security of the United States.” Later that month, “credible threats” were received by U.S. law enforcement and intelligence sources of an impending bombing of Israeli targets throughout the United States. While targeting Israeli interests is not uncommon, the fact that such targets were in the U.S. is somewhat alarming.

These statements and other episodes emphasize the ever‐increasing threat that confronts the United States. Terrorists, by nature, are continuously modifying their tactics to thwart defensive/protective measures placed before them by many nations. Therefore, it is contingent upon these nations to develop new strategies and remain one step ahead of the potential nuclear attackers. One such strategy is assassinating the terrorist before he strikes. While many commentators and politicians summarily dismiss this idea, it remains a viable, yet unexplored, option. This article details the historical and current perspectives on assassination as well as its legal significance and justification. While this author is not advocating a national policy of assassination, this argument is submitted strictly as an academic exercise for consideration and debate.     

The juridical status of the fetus: a proposal for legal protection of the unborn

This article investigates the juridical status of the fetus. It assesses what this status should be in the light of recent developments in case law, legislation, medicine, and technology (particularly in vitro fertilization). The article is presented in 5 sections: Section 1 deals with the supreme court's landmark decision in Roe vs. Wade, which relied on biological stages of fetal development rather than philosophical determination of when life begins. Section 2 examines the historical reliance on birth as the point at which legal protection vests in the developing human. Section 3 compares fetuses with newborn children, identifying relevant similarities and differences. Section 4 studies whether the fetus at all stages of development should have the same protection (the author concludes they should not). Section 5 examines the practical implications of choosing viability as a developmental stage of special significance for legal protection.     

An economic analysis of contracts signed between tour operators and travel agents

The tour operating process is based on many phases, one of which is the distribution of tourist products through the telephone, websites (direct sale) and through the traditional channel of exploiting travel agents’ skills and experience (indirect sale). This paper provides an economic analysis of contracts characterizing the relationship between tour operators and travel agents by taking into account risk-sharing, incentives and flexibility of contractual alternatives. The first part focuses attention on existing agreements regulating commercial and marketing aspects of the economic relationship with tour operators of both independent agents and agents belonging to a network, something whose importance is increasing over time. After the analysis of standard contracts, the paper describes controversial factors limiting the use of a potential compensation system based on a relative performance evaluation that, given the characteristics of the tourist market, could give firms a number of advantages. JEL classification D86. L14. L83     

Oregon's guidelines for physician-assisted suicide: a legal and ethical analysis

Oregon's Death with Dignity Act was first passed by a ballot initiative in 1994, but numerous judicial challenges delayed implementation of the Act. In November of 1997, following the United States Supreme Court decisions in Vacco v. Quill and Washington v. Glucksberg, which left the states' power to regulate physician-assisted suicide undisturbed, the Oregon voters upheld their law. Oregon remains the only state in the nation to authorize physician-assisted suicide. The Task Force to Improve the Care of Terminally Ill Oregonians published a Guidebook for health care providers on the Oregon Act, and the New England Journal of Medicine recently issued a special report on the first year's experience under the Act. This paper analyzes the legal context of the Oregon Death with Dignity Act, discusses the efficacy of the tenets in the Guidebook, and explores ethical issues underlying the guidelines, particularly those pertaining to the meaning of a patient's request for assisted suicide and processes supporting informed consent.     

Herzl's legal and economic views in The Jewish State: A scorecard

This paper compares Theodor Herzl's conception of the legal and economic institutions he envisioned in The Jewish State with those functioning Israel in 1995. His main goal, the establishment of a Jewish state, was achieved, but what has developed is not quite what Herzl expected, due mainly to the enormous burdens of defense. Nevertheless, many of the legal and institutional features of the economy he envisioned are in place, although in altered form.     

Technology transfer contracts between R&D labs and commercial partners: choose your words wisely

Our study is motivated by the problems encountered by external collaborators, particularly those between research and development laboratories and commercial partners, when writing technology transfer contracts. Kruskal?CWallis one-way nonparametric Analyses of Variance are used to analyze Cooperative Research and Development Agreements (CRADAs) from a national, Department of Defense laboratory in the United States of America. The CRADA information elements serve as the independent variables for the study. Benefits accrued by the laboratory serve as the dependent variable. The results highlight the link between information asymmetry and technology transfer and the connection between benefits obtained and contract specificity. Quantifying royalty streams in the CRADA increases the likelihood of achieving of these royalty payments. Too much contract detail may boomerang: limiting laboratory image enhancement, harming employee morale, and impeding efficient and effective laboratory management. Always, technology transfer involves a bargain: a contract where tacit knowledge must be nurtured and the amount of specificity managed.     

The shortage of transplantable organs: an analysis and a proposal

During the last decade there have been enormous advances in the transplantation of vital organs - in particular, the kidney, lung, heart, liver and pancreas. Unfortunately, efforts to provide the benefits of these operations to patients have been severely hindered by limitations in the supply of organs -limitations which, in the view of the author, are a consequence of regulation prohibiting the use of market incentives to increase the supply. We conclude that the law should be changed to allow the use of incentives to induce the donation of both present and future interests in cadaver organs.